The market for Ulster County residential real estate has slowed, and in the late summer of 2022 it appears both robust and wobbly. Its future direction depends a lot on the fluctuation of mortgage interest rates.
The steep rise in housing costs nationwide in the last two and a half years, intensified by expanded investor ownership and on-line lodging marketplaces, has caused widespread economic distress. It’s been particularly hard on renters, greatly exacerbating the growing gulf between the well-to-do and the disadvantaged.
Good for owners, bad for renters.
According to the Economic Policy Institute, 46 percent of renters nationwide are paying more than 30 percent of their incomes on housing.
The home ownership rate in the United States in the fourth quarter of 2021 was 65.5 percent. Partially because apartment rentals in New York City are so widespread, home ownership in New York State is only 53.6 percent.
The typical American home being purchased these days is 1900 square feet in size and has three bedrooms and two bathrooms. As of December 2020, according to a study of the mid-Hudson counties by Pattern for Progress, the average size of all homes built in Ulster County since 2015 was 2245 square feet. Except for a paltry few government-assisted units, the small amount of new housing being built has been for the upper end of the market.
Home prices still rising
The 2022 market for residential real estate in Ulster County is less strong than it was in the pandemic-intensified boom year of 2021. Prices have continued to rise this year, however, at better than the rate of inflation. According to Ulster County Multiple Listing Service records, 1195 transactions took place in the county from January 1 through August 16 of 2021 at a median sold price of $335,000. From January 1 through August 16 of this year, there were 921 transactions at a median sold price of $380,000.
Last year, the median length of time a house was on the market before it sold was 34 days. This year, the corresponding number has been 30 days.
The total of all residential real-estate sales at this time last year was $495.6 million. Because of reduced sales activity, this year it’s $417.8 million.
Last year at this time, 51 homes had sold for a million dollars or more (4.2 percent of total sales). So far this year, there have been 45 such sales (4.9 percent).
As usual, the Woodstock area leads the pack in terms of higher-priced properties. New Paltz-Gardiner, Saugerties, Stone Ridge-High Falls, and Accord-Kerhonkson follow.
Wallkill had only three million-dollar property sales recorded this year. Each was on the market for at least 90 days, and they eventually sold for $1.8 million, $1.92 million and a cool $3 million respectively.
Influx of immigrants
The median national residential property sale in July of this year was priced at $403,800, up 13.4 percent over last July, according to the National Association of Realtors. National sales were down 20.2 percent in number compared to 2021 July, however. They were down 23.8 percent in Ulster County through August 16.
The half-million-dollar property is becoming increasingly commonplace in Ulster County, with 35.7 percent of all listed sales reaching that mark at this time of year in 2021 and 39.4 percent this year; that’s now almost two of every five transactions.
Whether because of superstition or clever marketing, the $499,000 sale has become popular, with eight Ulster County properties selling for that sum last year and four in 2022. The prizewinner this year in the under half-million competition was a home in Saugerties recorded as changing hands for a price of $499,900.
Ulster County has been receiving an influx of migrants from the greater New York metropolitan area for decades. The first two and a half years of the pandemic have seen an acceleration of this phenomenon.
Local brokers are full of tales of potential purchasers from Gotham annoyed by the financial paperwork required for a closing deciding to pay all-cash instead. It’s disheartening for people who don’t know where their next month’s rent is going to come from to hear stories like that.
Systematic real-estate speculation and an increase in the number of units set aside for on-line lodging have only made the housing squeeze worse. On the other hand, the movement to allow accessory dwelling units (ADUs) of some sort has been gaining strength in New York State.
The 2021 Ulster County Housing Action Plan made clear that the housing market was in crisis even before the pandemic. “A combination of rising inequality and a failure to build the housing we need has produced an untenable situation for all but our highest-earning households,” said the report. “Nearly one-third of homeowners and more than half of renters in Ulster County are currently living in unaffordable homes.”
A study in contrasts
Just how unequal is income in Ulster County? It’s somewhere in the upper middle, ranking as the 1157th most unequal of the 3006 counties in the national rankings. The average income of the top one percent of all earners in Ulster County is $467,944, 14.5 times the average of the other 99 percent.
With a year’s income, the average one-percenter can buy the median Ulster County house for cash and still have $88,000 to scrape by on.
By contrast, the US Department of Housing and Urban Development found in 2020 that as many as 44 percent of adult homeless people were employed in full- or part-time work.
Even steady work was no longer enough to stay securely housed, said an article in The Nation. “HUD classifies half of all renters as “housing cost-burdened,” paying more than 30 percent of their pretax income for housing — and a quarter of all workers pay more than 50 percent, qualifying as severely cost-burdened. With rental costs so high, wages so low, and savings virtually nonexistent (about 40 percent of households would find it difficult to cover a $400 emergency expense), it’s little surprise even for working Americans when income divided by rent equals homelessness.”